Owning a home is a great dream for every person and every family. Only those who don’t own a home or live in a rented house can truly understand the true value of this pain and desire. To fulfill this hope, almost all banks in the country offer home loans. However, the biggest challenge in the home-buying process is the interest rate, as it directly impacts your monthly budget and EMI. Here, we will detail the government banks offering home loans at the lowest interest rates in the country.
Home Loans with the Cheapest Interest Rates
When you consider a home loan to purchase your own home, you should first look at banks with the lowest interest rates. Currently, major government banks, such as the Union Bank of India, the Central Bank of India, the Bank of Maharashtra, and the Bank of India, top the list. Home loan interest rates at these banks range from 7.10% to 7.35% per annum. Compared to other major private banks in the country, these rates are considered significantly lower and more budget-friendly, making it much easier on your pocket.
Bank of Maharashtra
Bank of Maharashtra has emerged as one of the most affordable home loan providers. The biggest advantage here is that if you have an excellent CIBIL score, you can get a loan at a starting rate of 7.10%. The bank offers loans with long tenures of up to 30 years and, in many cases, waives any processing fees. Additionally, women customers and defence personnel receive an additional 0.05% interest rate discount, making these loans even more affordable.
Central Bank of India
You can easily avail a loan from the Central Bank of India to renovate your home, purchase a new flat, or upgrade your interiors. The annual interest rate starts at 7.35 percent. This bank offers loans up to 90 percent of the home’s value for salaried individuals and up to 80 percent for business owners. The processing fee is also limited to a maximum of ₹20,000, and you can choose a tenure of up to 30 years.
Bank of India and Union Bank of India
Both banks have kept their interest rates very competitive, and the current interest rate at both institutions is 7.35 percent per annum. Union Bank finances up to 90 percent of your property’s value and also helps you avail subsidies under the Pradhan Mantri Awas Yojana (PMAY). At Bank of India, you can get a large loan amount of up to ₹5 crore, with a tenure of up to 30 years. Both banks are excellent for those who want large funds from a trusted government institution.
CIBIL Score and Other Precautions
As important as choosing an affordable home loan is, it’s equally important to understand its terms and conditions thoroughly. Your interest rate depends largely on your CIBIL score, and a score above 750 plays a crucial role in securing the lowest rate. Always ask the bank for a list of total expenses and hidden charges to avoid any additional burden later. Remember that choosing a longer tenure reduces your monthly EMI, but increases the total interest payment. It’s wise to choose the loan tenure and EMI based on your future income and savings.